Neil Lennon has been assured he has an immediate future at Celtic after the club tonight confirmed Tony Mowbray as their new manager. Three weeks after the resignation of Gordon Strachan and following a tense negotiation process with West Bromwich Albion, the Scottish side prised Mowbray from The Hawthorns for £2m compensation.

A further amount, thought to be close to £500,000, means Mowbray will take his assistants Mark Venus and Peter Grant to Glasgow. The potential arrival of Grant, like Mowbray and Lennon a former Celtic player, had prompted reports that Lennon could be on his way out of Parkhead. Yet the Northern Irishman, Strachan's first-team coach, will retain a coaching role under the new structure.

Celtic's board have privately stressed that Mowbray was always their No1 target to succeed Strachan, despite apparent overtures made towards Owen Coyle and Roberto Martínez. Mowbray, who invented Celtic's pre-match huddle – a ritual which still takes place – during his playing time at the club between 1991 and 1995, will be presented to the media tomorrow morning.

West Bromwich's chairman, Jeremy Peace, said: "Tony leaves with our best wishes for a successful future in football. We will now concentrate fully on the important task of appointing a new manager who can take the club forward.

"As we stated last week, we did not want to lose Tony nor did we encourage Celtic's approach. However, there was a compensation clause in Tony's contract which has been met to our satisfaction and, after talks with Celtic, Tony has decided to join them."

Mowbray has signed a 12-month, rolling contract at Celtic, as was the case with Strachan, worth about £1m a year. He is already understood to have drawn up a list of transfer targets, with Celtic keen to wrest the Scottish Premier League title back from Rangers' grasp and having a reported £8m to spend on transfer fees.

Mowbray's first match in charge will be on 12 July, a friendly against Brisbane Roar in Australia. His first competitive action comes on 28 or 29 July, the first of potentially two Champions League qualifying rounds.